Determinants of digitalization and digital divide in Sub-Saharan African economies: A spatial Durbin analysis. (November 2021) - Myovella, Godwin
Abstract: The aim of this paper is to analyse the determinants for digital divide in Sub-Saharan Africa (SSA) by considering inequalities in internet use and broadband subscriptions. The study considers 41 countries in the region which are geographically linked, and it allows for spatial interdependence. It also accounts for differences in demographic characteristics as well as social, political and economic infrastructure which affect ICT access and use. Globally, about half of the world's population is connected to the internet whereas the remaining half, i.e. about 3.8 billion people, are not (yet) connected. The problem is more severe in developing countries compared to developed countries; it is said to be unsatisfactory in SSA compared to other countries. We apply a spatial panel analysis using the spatial Durbin model (SDM) specifications for 451 observations from 2006 to 2016. Our estimation results show that there is a strong spatial interdependence among SSA, implying that internet access and broadband subscriptions in one country are affected by internet access and broadband subscriptions in another country, most likely due to spillover effects. Our results reveal that GDP per capita, gross capital formation, political stability, regulatory efficacy and electricity infrastructure directly affect the digital divide. Moreover, GDP per capita, population growth, government consumption, trade openness, and electricity infrastructure also indirectly affect the digital divide through spillover effects. Regarding policy implications we suggest that SSA governments should work closer together in ensuring internet openness and to increase the level of coordination between their countries in order to ensure digital inclusion in their countries. Highlights: Analyses digitalization and digital divide determinants in 41 Sub-Saharan African (SSA) economies. Employs spatial Durbin model for 41 geographically connected SSA countries. Finds strong interdependence of internet usage and access across SSA countries. GDP per capita, gross capital formation, political stability, regulatory efficacy and electricity infrastructure are important for digitalization. SSA governments should work closer in ensuring internet openness and increase the level of coordination between countries.